Short answer

Assume productivity metrics reflect reality and design for tangible improvements in output and efficiency, rather than relying on unmeasured value creation from new digital products.

Field: Resource Management
Source: The Journal of Economic Perspectives (2017)
Method: Empirical analysis using economic data
Evidence: Strong effect

Evidence suggests the recent slowdown in US productivity growth is a genuine economic phenomenon, not an artifact of undercounting the value of new digital products and services. This resource management research insight is drawn from a 2017 study published in The Journal of Economic Perspectives. Using Empirical analysis using economic data, researchers explored how this design variable affects real-world outcomes. The key design takeaway: Assume productivity metrics reflect reality and design for tangible improvements in output and efficiency, rather than relying on unmeasured value creation from new digital products.

Study

Resource ManagementHigh ImpactStrong effect

Productivity Slowdown is Real, Not Just a Measurement Error

Evidence suggests the recent slowdown in US productivity growth is a genuine economic phenomenon, not an artifact of undercounting the value of new digital products and services.

The Journal of Economic Perspectives · 2017

Key Findings

01The productivity slowdown is widespread across many countries, irrespective of their ICT investment levels.
02Estimated consumer surplus from digital technologies does not account for the magnitude of the 'missing output'.
03ICT-producing industries would need to have experienced vastly higher unmeasured growth to explain the slowdown.
04The divergence between GDP and GDI, potentially indicating unmeasured output, predates the slowdown and is linked to capital income, not labor income.

Application

Design takeaway

Assume productivity metrics reflect reality and design for tangible improvements in output and efficiency, rather than relying on unmeasured value creation from new digital products.

How to apply

When evaluating the impact of new technologies or design interventions, focus on quantifiable metrics of output, efficiency, and resource utilization. Consider how the value created will be reflected in standard economic measurements.

Project actions

01When proposing a new product or system, clearly define how its success will be measured using objective, quantifiable metrics.
02Consider how your design might impact broader economic productivity and how that impact could be assessed.

Method & Evidence

AimTo empirically challenge the hypothesis that the US productivity slowdown since 2004 is primarily due to mismeasurement of new digital goods and services.

MethodEmpirical analysis using economic data

ProcedureThe study analyzes four distinct datasets and economic indicators: international productivity trends in relation to ICT intensity, estimated consumer surplus from digital technologies, growth rates in ICT-producing industries, and the relationship between Gross Domestic Product (GDP) and Gross Domestic Income (GDI).

ContextNational and international economic productivity analysis

Variables

IVExplanations for productivity slowdown (mismeasurement vs. real factors)

DVMeasured productivity growth rates

CVICT intensity, consumer surplus estimates, industry-specific growth rates, GDP vs. GDI

Strengths & Limitations

Strengths

+Utilizes multiple, diverse analytical approaches.
+Draws on international comparative data.

Limitations

The complexity of economic data and the difficulty in isolating the impact of specific technologies can make it hard to draw definitive conclusions for a smaller design project.

Reliability & validity

The study's reliance on large-scale economic datasets and multiple analytical methods enhances its reliability and validity. However, the inherent complexities and assumptions within economic modeling introduce potential limitations.

Think critically

If the mismeasurement hypothesis is weak, what are the most likely *real* causes of the productivity slowdown, and how can design interventions address these root causes?

Design Principles

"Design for measurable impact and efficiency gains in resource utilization."

Understanding the true drivers of productivity is crucial for economic policy and business strategy. If the slowdown is real, it points to fundamental issues in how value is created and measured, impacting investment decisions and resource allocation.

What This Means for Your Design

The study shows that the reason we're producing less efficiently isn't just because we're not good at measuring the value of new tech like smartphones; the slowdown in productivity is likely a real problem.

How to use in your project

1.Use this research to justify the importance of quantifiable success metrics in your design project, arguing that real-world impact needs to be measurable.

Add to My Project

Quick Cite

Paragraph starter

This research highlights the importance of measurable outcomes in design. The study by Syverson (2017) challenges the notion that recent productivity slowdowns are merely due to mismeasurement of new digital goods, suggesting instead that these are real economic challenges. This underscores the need for design projects to focus on demonstrable improvements in efficiency and output, ensuring that the value created is quantifiable and not solely reliant on subjective or unmeasured benefits.

Source

The Journal of Economic Perspectives

Challenges to Mismeasurement Explanations for the US Productivity Slowdown

journal · 2017

View source

Questions About This Research

What does the research say about productivity slowdown is real, not just a measurement error?: Assume productivity metrics reflect reality and design for tangible improvements in output and efficiency, rather than relying on unmeasured value creation from new digital products. Evidence: The Journal of Economic Perspectives (2017).
Why does "Productivity Slowdown is Real, Not Just a Measurement Error" matter for design?: Understanding the true drivers of productivity is crucial for economic policy and business strategy. If the slowdown is real, it points to fundamental issues in how value is created and measured, impacting investment decisions and resource allocation.
How can designers apply this research?: Assume productivity metrics reflect reality and design for tangible improvements in output and efficiency, rather than relying on unmeasured value creation from new digital products.
What were the main findings?: The productivity slowdown is widespread across many countries, irrespective of their ICT investment levels.. Estimated consumer surplus from digital technologies does not account for the magnitude of the 'missing output'.. ICT-producing industries would need to have experienced vastly higher unmeasured growth to explain the slowdown.. The divergence between GDP and GDI, potentially indicating unmeasured output, predates the slowdown and is linked to capital income, not labor income.
What research method was used?: Empirical analysis using economic data.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2017 journal from The Journal of Economic Perspectives.
What should I do differently in my next project?: When evaluating the impact of new technologies or design interventions, focus on quantifiable metrics of output, efficiency, and resource utilization. Consider how the value created will be reflected in standard economic measurements.
What are the limitations?: The study relies on existing economic data and models, which themselves may have inherent measurement limitations. The precise quantification of consumer surplus from digital technologies remains challenging.